Another Look at the Northern Gateway Pipeline

Earlier this week, after almost four years of hearings and deliberations, Canada’s Joint Review Panel announced its approval of the Northern Gateway pipeline project. The panel, created by the Minister of the Environment and the National Energy Board, was tasked with evaluating the social, economic, and environmental harms and benefits of the proposed pipeline and making a recommendation on whether the project should proceed. The proposal now passes to the federal government, which has 180 days to come to a decision. The Joint Review Panel’s stamp of approval comes with a list 209 required conditions that Enbridge must adhere to and during construction.

Let’s start with some background. The Northern Gateway project is a proposal by Enbridge to build a twin pipeline from Bruderheim, Alberta to Kitimat, BC. One pipeline would carry 525,000 barrels of bitumen (heavy oil) per day from Alberta to the coast, while the other would transport condensate (a light oil mixture used to dilute the bitumen for transport) back east. The proposal includes the construction of a marine terminal in Kitimat, from where oil tankers could transport crude to Asian markets. To put this into context, the Alberta oil sands produced 1.7 million barrels of bitumen per day in 2011. The proposed Keystone XL pipeline, awaiting Obama’s final decision on its uncertain future, would transport 850,000 barrels per day from Alberta to the Gulf Coast.

I have to admit that I’m torn when it comes to pipeline construction. From a distance, it looks like a classic case of environment vs economy. I hate when questions are phrased in this way, since it perpetuates the inaccurate stereotype that one must be chosen at the expense of the other. In the majority of cases, I would argue, compromise is not only possible but also the path of least resistance. Due to the scale and nature of the Northern Gateway pipeline, however, some degree of polarization will inevitably exist.

The project creates two major environmental costs. First, it acts to perpetuate oil sands development. For those unfamiliar with the distinction between oil sands and conventional oil extraction, the former requires more energy due to its more intensive production and refining demands. As a result, the carbon footprint (and cost) per barrel of oil is higher. In terms of global CO2 emissions, Alberta oil sands are clearly one of the worst offenders and have thus become one of the faces of unsustainable energy use. Second, the pipeline’s nearly 1,200 km expanse crosses forests, waterways, towns, and First Nations territories; a spill could well prove devastating to wildlife, ecosystems, and locals.

The first argument can be rather easily dismissed. Oil sands operations have shown rapid growth in the past and present. Gateway is just one of the possible outlets of crude oil supply from the province, and in my mind far better than the alternatives. The first alternative is Keystone XL, which continues to route the majority of Albertan oil to the US. Given the United States’ recent drive towards energy independence, this option seems to lack foresight. Gateway allows the diversification of exports, reducing Canada’s economic dependence on the United States. Perhaps more significantly, there has recently been a disconcerting trend towards transport of oil by rail, fueled by the limited capacity of current pipeline networks. The risks presented by this option far exceed those posed by pipelines, as evidenced by this summer’s catastrophic derailment in Lac Megantic, Quebec, as well as notable others.

The second argument remains, but in my mind has been addressed with due diligence. The intensive review process has made Northern Gateway one of the most scrutinized proposals of its kind in the world. The fact that it has not been taken lightly is evidenced by the 209 conditions placed on the project by the Joint Review Board. These range from the development of a marine mammal protection plan to in-depth emergency response and spill management protocols. The review has not only ensured the ongoing transparency and accountability of the project but has also raised the standards for similar proposals in the future, not only in Canada but across the world. This, in my eyes, is key to breaking the environment vs economy stereotype; environmental risks should not be presented as an enemy to economic development of any kind, but should instead serve to establish a dialogue that promotes foresight and responsible decision-making.

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8 responses to “Another Look at the Northern Gateway Pipeline”

I’d have to disagree with you on the idea that the oil sands will continue to expand regardless of whether the proposed pipelines (Northern Gateway and Keystone XL) get approved.

The oil sands will only be economic in their expansion while we continue to do nothing about climate change and the price of oil stays above $60US a barrel.

Given the rapid expansion of smart grids which will power distributed hybrid renewable grids as well as the rapidly increasing seriously weird and extreme weather from climate change, the question should actually be: avoid stranded infrastructure from abandoned projects that were rushed through and are no longer economically viable, or start to actually diversify energy companies away from fossil fuels.

I don’t count ‘different directions of pipeline’ as economic diversification of an economy, and the post-carbon economy is gathering steam faster than fossil fuel companies would like to admit.

Amy – I completely agree that the long-term economics of the oil sands production are unsustainable. That said, the assumption I’m making (one that I feel is justified, if unfortunate), is that there won’t be much done in the short- to medium- term in Alberta from an environmental standpoint to penalize producers. I think that given the sociopolitical and geographic context within, the province will be dragged along kicking and screaming behind the global wave of climate change action. The lifespan of the oil sands will be artificially extended due to its location in Alberta as opposed to another province or state. Looking from that perspective, crude oil will have to be transported out of the province in the short- to medium-term, and Northern Gateway seems to me to the best available option. Again, I stress that the rather unfortunate premise here is that little, if any, environmental action will be undertaken by the province in the near future.

Given that there won’t be much done in the short to medium term in Alberta on climate policy, I think that would be even more reason to reject the pipeline.

Rejecting the pipeline will slow the growth of the oil sands, which in turn will allow for greater time for renewables to be competitive in Alberta. It will also minimise the amount of money that is sunk into infrastructure that will need to be retrofitted or abandoned as we transition away from fossil fuels.

Given that the long term economics are unsustainable and there’s little short term willingness to do what is required, slowing irresponsible expansion in a dying industry seems pretty responsible to me, with both short and long term economic and climate benefits.

I’d have to agree with most of your points, but my stress remains on the timeline at play. I’m not convinced that rejection of the pipeline would have a notable impact on oil sands growth. I think the driving force is strong enough that transportation will turn to paths of higher resistance, such as over-stressing existing pipeline networks or sending oil by rail. As far as the ‘dying’ industry, my bet would be that fossil fuels in Alberta will be a major player even after the lifetime of any pipeline built today.

I find it interesting that you think the oil sands will outlast the lifetime of a pipeline. For me the macroeconomics don’t line up.

If we assume a pipeline will have an approx. 30yr lifespan and they manage to build it and have it operational by 2015, it will be pumping bitumen to the coast through to 2045.

By 2045 with best estimates we’ll be between 1.5C and 3C of global warming.

To me, this means that by 2045 we either need to have fully decarbonised the global economy or at least have decarbonised our energy systems and be well on our way to decarbonising the rest of the economy.

The oil sands, if they have any role to play in a low-carbon or zero-carbon economy would be as small suppliers of oil as a feedstock for pharma or closed-loop manufacturing of plastics for example.

Which to me, says that it’s capacity that won’t be needed within the next two decades unless we plan on totally cooking the atmosphere.

Amy – I fear that you’re rather more of an optimist than I am in that department. Even if we’ve reached 3 degree warming by 2045, I find it difficult to imagine a scenario where we’ve managed to decarbonize completely or even mostly by then. And even if the process is well underway, which with any luck it will be, I would picture Alberta at the tail, not the forefront, of the shift. So in my eyes, while it’s certainly likely that our hydrocarbon exports will have taken a hit by that point, I’d still expect the oil sands to be a major economic driver.

Given that it is a done deal, it is not worth re-arguing a case here. However, I do worry about the precedent that this type of project contract sets. If this is accepted because of its extensive imposed conditions it could act as a blueprint for open slather on oil exploration anywhere. It will be seen as acceptable and become normalised. Incentives to reduce our dependency on oil will be less valued. There is too much focus on increasing supply and not enough on reducing demand and, as you will be well aware, externalities are always a problem. A little positive discrimination in favour of the environment is needed to balance the fervent economic focus of late. It is a well presented article, Alan, even if I don’t agree with the sentiment 🙂

Janis – my response is the same as to Amy’s comment above. I will take a more optimistic perspective though, regarding the trend that the pipeline is setting. I think that construction of large pipelines in the past has been rather irresponsibly planned and carried out with respect to local environmental impacts and risk management in many cases. In my mind, the intensive process and scrutiny that accompanies this project is a sign that the consideration of environmental concerns is only growing. I think the long incubation time of this proposal is a sign of things to come; the indiscriminate acceptance of large pipeline projects is a remnant of the past. Or so I hope.